Robert Allen Stanford

Robert Allen Stanford, chairman of the Stanford Financial Group of Companies

In early February 2009 the Securities and Exchange Commission, the Federal Bureau of Investigation, the Florida Office of Financial Regulation, and the Financial Industry Regulatory Authority, a major U.S. private-sector oversight body, were investigating Stanford's company Stanford Financial Group, and questioning the means by which Stanford International Bank manages consistently to make higher-than-market returns to its depositors. A former executive told SEC officials that Stanford presented hypothetical investment results as actual historical data in sales pitches to clients. The Securities and Exchange Commission charged Allen Stanford with "massive ongoing fraud" centered on an eight-billion-dollar investment scheme. Stanford's assets, along with those of his companies, were frozen and placed into receivership by a U.S. federal judge. Four federal tax liens were also placed against Stanford totaling more than $212 million.

In June 2009, Congressman Dennis Kucinich (D-OH) said that the Securities and Exchange Commission [SEC] was told to stand down by the Department of Justice in its investigation of billionaire financier Robert Allen Stanford’s global banking empire. Kucinich is the chairman of the Domestic Policy Subcommittee of the Oversight and Government Reform Committee.

“The SEC received numerous reports of the fraud being carried on by Stanford Group over the past decade and the least they could have done was disclose that information so investors could make an informed decision. Instead, the SEC became an accomplice to the fraud that has resulted in the loss of 28,000 investors’ retirement accounts, family trusts, pension plans and college savings.” - stated the Stanford Victims Coalition.

On June 25, 2009, Stanford appeared in a Houston court and pleaded "not guilty" to charges of fraud, conspiracy and obstruction.

"A lot of people who are responsible (for the crisis) seem to have gotten awfully rich in the process," said Barbara Roper, the director of investor protection for the Consumer Federation of America. Ralph Cioffi, former Bear Stearns investment fund founder and his fund manager, Matthew Tannin

On June 19, 2008, Cioffi and Tannin were charged with defrauding investors by claiming mortgage bonds were a safe investment, even though they described the market for subprime mortgages as "toast" in their own e-mails. Cioffi also faces charges of insider trading.